Uncertain multi-billion investments to reduce emissions from industry

The Industrial Leap programme aims to support new and innovative ways to reduce climate-impacting emissions from industry and society at large. The Swedish National Audit Office’s audit shows that the Industrial Leap has been neither designed nor managed to contribute as effectively as possible to the green transition of the industrial sector and to Sweden’s climate goals.

“The Government’s design of the Industrial Leap programme has not been sufficiently well planned,” says Deputy Auditor General Claudia Gardberg Morner.

Initially, the Industrial Leap was a relatively limited grant directed to the processing industry. While the programme has since been expanded twice, the Government has not analysed the consequences of matters such as changes to the target group or which measures are covered by the programme.

These expansions have led to an overlap with another programme for climate investments, the Climate Leap. Some actors can therefore apply for financial support from both the Industrial Leap and the Climate Leap for equivalent investments. The Industrial Leap places lower demands than the Climate Leap on estimates for investments’ emission reductions, which is not reasonable, according to the Swedish National Audit Office.

The Swedish National Audit Office further notes that there is a risk that many of the measures that have received support under the Industrial Leap cannot be implemented, for example due to lack of access to electricity or uncertainty in permit processes linked to other environmental objectives.

The audit also shows deficiencies in the Swedish Energy Agency’s management of the Industrial Leap. For example, the Agency’s approach to collecting essential information for assessing applications is inefficient and involves a risk of unequal treatment of applicants without grounds.

Likewise, the Swedish Energy Agency has not ensured that applications are comparable. Applicants have been allowed to decide for themselves how they calculate expected emission reductions, which has led to the use of several different methods and boundaries. This makes it difficult for the Swedish Energy Agency to rank the projects.

“The Swedish Energy Agency has thus not ensured that the most effective projects are granted funding,” says Linda Sahlén Östman, Project Leader for the audit.

Another shortcoming is the Swedish Energy Agency’s failure to systematically collect all the information needed to evaluate the results of the projects. This mainly involves reduced emissions. In its reporting to the Government, the Swedish Energy Agency has instead used the estimates provided by the applicants in their application. These estimates are uncertain and not comparable between projects.